Lecture Dynamic business law, the essentials (2/e) - Chapter 4: Constitutional law

After reading this chapter, you will be able to answer the following questions: What is federalism? How does the U.S. government’s system of checks and balances operate? What effects does the commerce clause have on the government’s regulation of business? How does the Bill of Rights protect the citizens of the United States?

Chapter 4

Constitutional Law

The United States Constitution

• Establishes a “federalist” system of

government (with authority divided between the federal and state

governments)

• Allocates power among the three federal

branches of government (legislative, executive, and judicial)

• Establishes a system of “checks and

balances”

Figure 4-1: The System of Checks and Balances

Legislative Branch (U.S Congress)

• Can refuse to ratify treaties

• Can impeach and remove

president

On Judicial Branch:

• Can pass amendments to overrule judicial rulings

• Can impeach judges

• Establishes lower courts and sets number of judges

Figure 4-1: The System of Checks and Balances

Executive Branch (U.S President)

• Appoints federal judges

• Can pardon federal offenders

Exhibit 4-1: The System of Checks and Balances

Judicial Branch (U.S Federal Court System)

The Supremacy Clause (Article V of

the United States Constitution)

• Provides that federal law is the “supreme

law” of the United States

• Any state or local law that directly conflicts

with federal law is void

The Commerce Clause (Article I, Section

8 of the United States Constitution)

• The primary source of authority for federal

regulation of business

• States that the U.S Congress has the

power to “regulate Commerce with foreign

Nations, and among the several States…”

• Simultaneously empowers the federal

government and restricts the power of state

governments

Taxing and Spending Powers of the Federal

Government (Article I, Section 8 of the United

States Constitution)

• Provides the power to “lay and collect Taxes,

Duties, Imports and Excises.”

• Taxes imposed by Congress must be uniform

across the states

• The federal government can use tax revenues to

provide essential services, encourage

development of certain industries, discourage

development of other industries

• Regulatory impact of tax does not affect its

constitutionality

Other Constitutional Restrictions on

Government

• Privileges and Immunities Clause

• Full Faith and Credit Clause

• Contract Clause

Exhibit 4-1: Summary of the Bill of

Rights: The First Amendment

• Protects freedom of religion, press,

speech, and peaceable assembly

• Ensures that citizens have the right to

ask the government to redress

grievances

Exhibit 4-1: Summary of the Bill of

Rights: The Second Amendment

Finds that in light of the need for a

well-regulated militia for security,

government cannot infringe on citizens’

right to bear arms

Exhibit 4-1: Summary of the Bill of

Rights: The Third Amendment

Provides that government cannot house

soldiers in private residences during

peacetime, or during war, except for

provisions in the law

Exhibit 4-1: Summary of the Bill of

Rights: The Fourth Amendment

• Protects citizens from unreasonable

search and seizure

• Ensures that government issues

warrants only with “probable cause”

Exhibit 4-1: Summary of the Bill of

Rights: The Fifth Amendment

• Ensures that government does not put citizens

on trial except upon indictment by a grand jury

• Gives citizens the right not to testify against

themselves (privilege against self-incrimination)

• Prevents government from trying citizens twice

for the same crime (double jeopardy)

• Creates the right to due process

• Provides that government cannot take private

property for public use without just

compensation

Exhibit 4-1: Summary of the Bill of

Rights: The Sixth Amendment

• Provides the right to a speedy public trial

with an impartial jury

• Provides the right to know what criminal

accusations a citizen faces

• Provides the right to have witnesses both

against and for the accused

• Provides the right to an attorney

Exhibit 4-1: Summary of the Bill of

Rights: The Seventh Amendment

States that in common law suits where

the monetary value exceeds $20,

citizens have the right to a jury trial

Exhibit 4-1: Summary of the Bill of

Rights: The Eighth Amendment

• Provides that government will not set

Exhibit 4-1: Summary of the Bill of

Rights: The Ninth Amendment

Provides that although the Bill of Rights

names certain rights, such naming does

not remove other rights retained by

citizens

Exhibit 4-1: Summary of the Bill of

Rights: The Tenth Amendment

Provides that powers that the U.S

Constitution does not give to the

federal government are reserved to the

states

Speech Not Protected By The First

Amendment

• Defamation

• Obscenity

• Fighting Words

U.S Supreme Court Standard of Obscenity

Established In Miller v California

• Would the average person, applying

contemporary community standards, find that

the speech appeals to the prurient interest?

• Does the speech depict/describe sexual

conduct in a patently offensive way?

• Does the speech lack serious literary, artistic,

political, or scientific value?

First Amendment Provisions Protecting

Citizens’ Freedom Of Religion

• The Establishment Clause

-Provides that government “shall make

no law respecting an establishment of religion”

• The Free Exercise Clause

-States that government cannot make

a law “prohibiting the free exercise” of religion

U.S Supreme Court Tests For Determining Whether A

Particular Government Statute Violates The

Establishment Clause (As Set Forth In Lemon v

Kurtzman)

• Does the statute have a secular legislative

purpose?

• Does the statute’s principal or primary effect

either advance or inhibit religion?

• Does the statute foster an excessive

government entanglement with religion?

The Fifth Amendment Due Process

Clause

States that government cannot

deprive a person of life, liberty, or

property without due process of law

Types Of Due Process Guaranteed By The

Fifth Amendment Due Process Clause

• Procedural Due Process—Requires

government to use fair procedures when taking life, liberty, or property

• Substantive Due Process—Ensures basic

fairness of laws that may deprive life, liberty,

or property

The Fifth Amendment Takings

Clause

Definition: Constitutional guarantee

providing that when government takes

private property for public use, it must pay

the owner just compensation, or fair market

value, for his/her property

The Fourteenth Amendment of the United

States Constitution (the “Equal

Protection” Clause)

• Prevents states from denying “the equal

protection of the laws” to any citizen

• Combats discrimination, since it applies

whenever government treats certain

individuals differently than other

“similarly-situated” individuals

Judicial Tests to Determine Violations of the

Fourteenth Amendment

• “Strict Scrutiny” Test: Applies to “suspect classifications”

based on race, national origin, and/or citizenship that

would prevent individuals from exercising a fundamental

right (such classification allowed only if necessary to

promote a “compelling state interest”)

• “Intermediate Scrutiny” Test: Applies to classifications

based on gender or on the legitimacy of children (such

classification allowed only if it is substantially related to

an “important government objective”)

• “Rational Basis” Test: Applies to all other matters (such

classification allowed only if it advances a “legitimate

government interest”)